Freedom of Expression and the 1992 Cable Act: an Introduction Eli M

Hastings Communications and Entertainment Law Journal Volume 17 | Number 1 Article 1 1-1-1994 Freedom of Expression and the 1992 Cable Act: An Introduction Eli M. Noam Carolyn Cutler Follow this and additional works at: https://repository.uchastings.edu/ hastings_comm_ent_law_journal Part of the Communications Law Commons, Entertainment, Arts, and Sports Law Commons, and the Intellectual Property Law Commons Recommended Citation Eli M. Noam and Carolyn Cutler, Freedom of Expression and the 1992 Cable Act: An Introduction, 17 Hastings Comm. & Ent. L.J. 1 (1994). Available at: https://repository.uchastings.edu/hastings_comm_ent_law_journal/vol17/iss1/1 This Article is brought to you for free and open access by the Law Journals at UC Hastings Scholarship Repository. It has been accepted for inclusion in Hastings Communications and Entertainment Law Journal by an authorized editor of UC Hastings Scholarship Repository. For more information, please contact [email protected]. Freedom of Expression and the 1992 Cable Act: An Introduction ELI M. NOAM* and CAROLYN CUTLER** Table of Contents I. The 1992 Cable A ct ..................................... II. Th e Issues .............................................. III. Common Carriage as a Free Speech Remedy? .......... * Professor of Finance and Economics, and Director, Columbia Institute for Tele- Information, Graduate School of Business, Columbia University. A.B. 1970, A.M. 1972, J.D. 1975, Ph.D. Economics 1975, Harvard University. ** Research Affiliate, Columbia Institute for Tele-Information, and Director, Instruc- tional Technology, New York School for the Deaf. B.A. 1981, M.A. Communications 1992, University of Texas. HASTINGS COMM/ENT L.J. [Vol. 17:1 Introduction On October 5, 1992, Congress passed the Cable Television Con- sumer Protection and Competition Act1 (1992 Cable Act) by overrid- ing a presidential veto, the only such occurrence during President Bush's term of office. This followed years of vigorous battles among warring interest groups, contending legislators, and crusading advo- cacy groups. Yet the clamor of political battle was not matched by a constitutional debate. With economics and politics the main topics, freedom of speech was a side show. Today, with a bit of distance, with electronic media converging, and with the information superhighway a Washington buzzword, one can resume the questioning. Is it constitutional under the First Amendment to create regulations that restrict a communications medium such as cable television? Looking at the 1992 Cable Act, one can identify numerous free speech issues, including the following: " Is there a constitutional asymmetry in the treatment of various communications media? " In what ways does new communications technology affect free speech rights? " Is it constitutional to mandate preferential access to a physical transmission conduit by some content providers? Can one differ- entiate between commercial and non-profit voices? * What is the relationship between common carriage (mandated non-discriminatory access) and free speech? " Can owners of one medium be precluded from owning another? " Is it constitutional to mandate the licensing of one firm's program content by competing firms? * Can a conduit be liable for content transmitted by it under legal requirement? " Can a multichannel conduit be required to segregate certain programs onto designated channels? " Is it constitutional to require broadcasters to have their programs distributed by cable operators without permission or compensation? * Is it constitutional to make the presence of effective competition a condition for free speech? " Can one require cable operators to prohibit certain programs from access channels, to segregate adult programs onto a single channel, and to make the operator liable for them? 1. Pub. L. No. 102-385, 106 Stat. 1460 (codified as amended at scattered sections of 47 U.S.C.) [hereinafter 1992 Cable Act]. 2. 138 CONG. REC. S16,676 (daily ed. Oct. 5, 1992). 1994] THE 1992 CABLE ACr To address these questions, the Columbia Institute for Tele-Infor- mation (CITI) convened a group of noted scholars, each with a per- spective of the 1992 Cable Act, and each an expert on speech, communications law, or media economics. Their work was then dis- cussed by noted practitioners, officials, and scholars. CITI is a nonprofit research center at Columbia University. It seeks to analyze and discuss issues of communications, economics, law, and policy. CITI does not engage in consulting or proprietary studies and takes seriously its independence from interest groups. The project was funded by the following: CITI's general funds; the Freedom Forum Foundation (formerly the Gannett Foundation, with a major stake in the Gannett Company, the owner of newspapers, broadcast stations, and advertising businesses); and Dr. Leonard Tow, Chairman and CEO of the cable and telecommunications firms Cen- tury Communications Corporation and Citizens Utilities, together with his cable industry associates from the Entrepreneurs' Club. As agreed from the outset, none of these parties other than CITI played any role in the selection of the topics or authors. The authors span a wide range of perspectives and conclusions. They were not selected to represent any particular point of view, but rather because of their outstanding reputations in the scholarship of speech and communications. Regardless of the authors' views on any part of the 1992 Cable Act, the reader will find these articles provocative. I The 1992 Cable Act The Cable Television Consumers Protection and Competition Act is a response to the industry conditions that were encouraged by an earlier major piece of legislation, the Cable Television Communica- tion Policy Act of 1984.1 That law, passed at the height of the Reagan years with bi-partisan support and shepherded through Congress by the Telecommunications Subcommittee Chairman, Congressman (soon Senator) Timothy Wirth of Colorado, substantially deregulated the cable industry from price controls by local governments and largely eliminated the threat of non-renewal of a franchise. Freed from restrictions, the cable television industry developed after 1984 even faster than before. It increased channel capacity (to an average 3. 47 U.S.C. §§ 521-559 (1984). HASTINGS COMM/ENT L.J. [Vol. 17:1 of thirty-seven in 19934), program diversity (there are over one hun- dred satellite service channels5), reach (passing over ninety percent of households), and customer base (sixty-three percent of television households6). Yet cable television's very success also bore the seeds of its subsequent reregulation. Cable's attractiveness raised demand for it, while the high cost of upgrade and the debt repayment of ex- pansion put pressure on the supply side. With only limited multichannel competition, cable rates increased-according to Congress, three times as fast as inflation. At the same time, the quality of service led to many consumer complaints, but local governments across the coun- try lacked regulatory powers to remedy the situation. On the content side, cable's high penetration gave the cable industry increasing gatekeeper power over access to a viewer by a program provider. They had the power to pick and choose program channels and exclude those posing a threat to their own affiliated program channels. Furthermore, they could deny popular program channels to competing delivery media such as direct satellite broadcasters, microwave "wireless cable" operators, telephone companies, and al- ternative cable systems. With over-the-air broadcasting channels re- ceived increasingly over the cable wire and reception antennas dismantled, television broadcasters were worried about not being car- ried over cable or being placed on unfavorable spots on the dial. As a consequence of these various concerns, a broad-based coali- tion of consumer groups, broadcasters, municipalities, and other po- tential competitive media formed and campaigned for reregulation. Allied with the cable industry were the Hollywood studios, the White House, and some deregulation-minded legislators. In 1990, a regulatory bill passed the House but failed in the Sen- ate. In 1991, the FCC, under Congressional pressure, adopted a stricter definition of "effective competition." But for Congress it was a matter of too little, too late. Soon, new bills were introduced by Representative Edward Markey and Senators Ernest Hollings, Daniel Inouye, and John Danforth. At that point, the cable television industry could possibly have averted large-scale regulation by supporting a real opening of multichannel television to much greater competition, substituting market forces for regulation. But the cable industry, confident that a presi- 4. SUSAN TYLER EASTMAN, BROADCAST/CABLE PROGRAMMING: STRATEGIES AND PRACTICES 246 (4th ed. 1993). 5. Id. at 247. 6. A.C. NIELSEN Co., NIELSEN REPORT ON TELEVISION (Feb. 1994), cited in NA- TIONAL CABLE TELEVISION ASS'N, CABLE TELEVISION DEVELOPMENTS (Apr. 1994). 1994] THE 1992 CABLE ACT dential veto would hold, as thirty-five previous Bush vetoes had, op- posed both regulation and greater competition. It lost when rural and moderate Republicans broke rank with President Bush and voted for a regulatory bill. The vote was 74-25 in the Senate 7 and 308-114 in the House.8 The sprawling new Act's major provisions sought, among others: " To reimpose rate regulation by local governments on "basic tier" cable service where a cable system is not subject to effective competition;

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